Detailed information about loan restructuring. State assistance in restructuring mortgage loans by the population What is restructuring
Regular borrowers of financial institutions who have proven themselves to be good can apply for. To do this, it is necessary to fulfill a number of requirements and conditions, as well as document the reason for the financial difficulties that forced you to contact the bank with a request for restructuring.
What is restructuring?
Many people do not know, therefore, in the event of a temporary loss of solvency, they try to resolve the issue in other ways in order to prevent delays with the bank. This program is intended for borrowers who fulfill their obligations on time and have never violated the payment regime. Carrying out debt restructuring allows the Bank of Moscow to avoid unnecessary costs associated with filing lawsuits against debtors, as well as attract new clients with loyal conditions.
Loan restructuring at the Bank of Moscow is carried out on individual terms for each client. Depending on the circumstances affecting solvency and the type of existing loan, the following measures can be taken:
- Credit holidays provided.
- The duration of the program has been extended.
- The amount of mandatory payment has been reduced.
- Conversion of foreign currency debt into Russian rubles was carried out.
- A new payment schedule has been developed.
- The loan was refinanced.
note: In this financial institution, this program is carried out on the same principle as. To participate in it, the client must document the reasons for the temporary loss of solvency.
Reasons for restructuring
To arrange a loan restructuring at the Bank of Moscow, the client must have compelling reasons, supported by documents:
- Loss of the main place of employment (except for cases in which the dismissal was due to the fault of the employee, in particular, the situations described in Article 81 Labor Code Russia), reduction, dismissal by mutual consent, according to at will. The borrower’s being on unpaid leave may also be taken into account as a reason.
- Illness of the borrower or his close relative (only first degree of relationship).
- An unsustainable debt load that arose due to amendments to a loan agreement executed at another financial institution. The financial burden that arose due to a court decision on a loan in which the Bank of Moscow client acted as a guarantor can also be taken into account.
- Decline wages. Liquidation of the enterprise where the borrower worked.
- Loss of ability to work, maternity leave, birth of a child, death of a close relative.
- Destruction of the client’s personal property, which is pledged to the financial institution.
Finding themselves in a difficult financial situation with a loan, many people try to solve their problem with the help of debt restructuring offered by the bank. This allows you to extend the loan term, reducing the monthly financial burden.
But, often, the lack of knowledge leads to the fact that after this procedure the deplorable situation gets even worse. Let's figure out what restructuring of overdue loans is and how much it helps ease the financial situation of the borrower.
When financial problems arise due to late payments, difficulties arise that gradually lead to legal proceedings and the procedure for forced debt collection. In this case, the court, as a rule, orders the restructuring of the borrower's overdue loan, which allows him to gradually repay the debt.
The debt restructuring procedure can be initiated by the Creditor himself if he does not want to bring the matter to court and enter into lengthy litigation.
The key point in loan restructuring is changing the terms of the agreement, the purpose of which is to reduce the financial burden.
Increasing the term of the loan agreement reduces the amount of the monthly payment, allowing the borrower to gradually repay the debt.
By agreeing to restructure the loan debt, of course, the bank makes certain concessions to the borrower, who this moment is in a difficult financial situation and cannot fulfill its financial obligations under the contract. The reason for revising the basic terms of the contract is late payments or a statement from the client himself.
Restructuring can be carried out on the initiative of:
- The Borrower himself. Seeing that the financial burden of the monthly payment is becoming an unbearable burden, the borrower may not allow late payments, but immediately contact his Lender with a request to make changes to the agreement. If the answer is positive, this will avoid penalties.
- Lender. If the client fails to fulfill his obligations under the contract and makes late payments, the Bank may offer him to restructure the debt in one of the following ways.
Differences between restructuring and refinancing
Many people confuse two concepts such as refinancing and restructuring of an overdue loan. Despite the common mechanism of action, these are two completely different financial instruments.
If it is associated with the full repayment of the first and the conclusion of an agreement for the second loan, then the restructuring can only be carried out in the bank where the loan was issued.
In addition, in order for the bank to agree to the loan refinancing procedure, the client must prove his solvency and, at a minimum, avoid late payments.
Clients come to the decision to refinance even before significant delays appear, realizing that the monthly payment is becoming an unbearable financial burden that the client is unable to bear. So he turns to the bank with a request to change the terms of the agreement and reduce the amount of the monthly payment by increasing the loan term.
In this case, the client can contact either his own bank, with which he has a loan agreement, or a third-party bank.
Video. Debt restructuring
Reasons for loan restructuring
The reason for restructuring may be:
- loss of monthly income;
- dismissal from work;
- loss of one of the breadwinners;
- conscription into the army;
- a sharp deterioration in health;
- loss of ability to work;
- changes in the financial market (currency growth);
- various life circumstances.
Many families whose income level has fallen due to the crisis are coming to the decision to refinance.
Fearing a late payment, the borrower has an urgent need for refinancing. After all, monthly delays threaten with severe penalties, and you don’t want to be blacklisted by borrowers.
Yes, refinancing does not relieve you of financial responsibility and does not reduce the amount of the remaining debt, but it allows you to calmly repay it, without penalties or damaged credit history. After signing a new contract, the client has the opportunity to extend the term. As a rule, banks increase the loan term, which reduces the financial burden of the monthly payment.
Of particular interest in on-lending are credit programs with a repayment period of more than three years. This makes it possible to significantly simplify the debt repayment scheme.
When talking about signing a new agreement, this is what we need to focus on.
Unlike refinancing, restructuring does not involve a new contract. Only its addition changes, which reflects the monthly repayment schedule.
Main differences:
- the presence of arrears and bad credit history may be a reason for refusal to refinance the loan;
- Refinancing can be internal or external. Any new lender can refinance an existing agreement.
- restructuring is carried out only in the bank where the loan was issued.
Loan restructuring provides a good opportunity to avoid litigation in the event of financial difficulties.
The reasons for the problems that lead to the need to revise the terms of the contract can be very different: from a sharp deterioration in the financial condition of the family, loss of basic income to health problems.
When requesting a revision of the terms of the contract (increasing the term to reduce the financial burden), the borrower pursues two goals:
- calmly pay off the remaining debt;
- avoid litigation.
What benefits does debt restructuring give to a borrower?
If there is a slight delay and the client himself initiates the issue of revising the terms of the contract, the borrower can count on:
- maintaining a positive credit history;
- saving money on litigation;
- avoiding forced debt collection.
We have already said more than once that credit history is one of the main criteria for deciding whether to issue a loan. Therefore, many clients are afraid of a decrease in their credit rating and a deterioration in the quality of their history.
Of course, banks are not obliged to carry out a restructuring procedure at the first request of clients, and in order to provide such a service, they must see objective reasons. If the delay is made without reason, only because the client forgot or did not pay the monthly payment, the financial institution may refuse to revise changes to the terms of the contract.
Loan restructuring benefits both parties. It helps the borrower avoid deterioration of his credit history and wait out a difficult financial period. To the creditor - to return his debt.
If, after considering the reasons indicating the restructuring, the bank sees that this will only delay the inevitable moment of another delay, then it may refuse to revise the terms.
In this case, litigation cannot be avoided, but then the Court will understand the objective reasons that led to the difficult financial situation and the impossibility of paying off the debt.
Types of restructuring
There are several options for debt restructuring, but most of them are carried out only if the client himself initiated the procedure for revising the terms.
Restructuring means any change to the contract: repayment period, schedule, monthly amount, interest or currency.
The main purpose of making such changes is to stimulate the client to make payments and prevent new delays.
The following restructuring options are available:
For example, the amount of the total debt is 200 thousand rubles and, according to the terms of the loan agreement, the monthly payment is 11,183 rubles (subject to the conclusion of an agreement for 24 months, 30% per annum). At some point, the borrower realizes that he is unable to pay such an amount to the bank every month and asks to reconsider the terms of the agreement in order to reduce the amount of the monthly payment.
The bank agrees to change the loan term from 24 months to 36 months, which reduces the payment to 7,668 rubles.
As this example shows, two parties benefit from debt restructuring. On the one hand, the client does not allow late payments, litigation and does not spoil his credit history. On the other hand, the bank, agreeing to new conditions, receives an additional 24 thousand rubles per year.
- Changing the lending currency. The majority of Russian citizens resorted to this option in 2008, as the global crisis significantly affected the dollar exchange rate and put thousands of borrowers who took out loans in foreign currency into a financial impasse.
With the sharp fall of the ruble, many clients were simply unable to repay loans in dollars, while receiving their main income in rubles. In this regard, banks willingly agreed to debt restructuring, transferring the main currency of the agreement from the dollar (or euro) to Russian rubles.
Changing the lending currency
The transfer was carried out at the national currency conversion rate on the day the agreement was concluded. But in fairness, it is worth noting that this option of on-lending is less profitable for the bank and it does not always agree to such changes in the agreement, especially when the financial situation of the market is unstable.
- Providing credit holidays. For a certain period of time (from one month to three), the bank exempts the borrower from having to pay the loan. However, the conditions can be very different. Either the Lender arranges a real holiday for the entire loan for a certain period, or partially exempts from payment of the “loan body”. At the same time, the client must still pay a monthly commission and interest on the loan.
This option does not exactly involve debt restructuring, but rather allows the client to take a temporary financial break in order to accumulate cash and continue to repay the loan without delays.
Some banks offer even more favorable conditions and allow the borrower to repay only the “body of the loan” during the year. This reduces the principal portion of the debt on which interest is calculated.
- Transfer of a loan agreement from a card account to a consumer loan. This allows the client to save on interest, since a consumer loan usually has a lower interest rate.
- Reduced loan rates. This option partially relates to the refinancing format and involves changing the annual rate. But not all banks take this step and only if they have an ideal credit history.
- Changing the payment structure. The entire debt is divided into three parts: the body of the loan, interest under the agreement, fines (if there were already any for late payment). It is beneficial for the bank to return the issued funds as quickly as possible, and only then make a profit from the loan.
- Write-off of fines for repeated delays. Of course, this affects the bank's potential profit, but it allows you to reduce the total amount of debt, providing an incentive to repay the principal debt. Many banks agree to such a procedure in order to return the principal amount of the loan and receive interest on the loan. Do not forget that neither party is interested in litigation, as this is associated with a lot of time wasted and additional material costs.
In addition, a lengthy trial may lead to the fact that gradually the Lender will not be able to recover even part of the issued loan. Of course, some borrowers resort to this trick, realizing at some point that they are simply unable to repay the loan. But it is worth noting that this will have a sad effect on your credit history. In this case, a person will not be able to use the services of banks and other credit institutions in future.
The option of writing off arrears and fines is a very rare practice. Banks usually resort to it only in case of bankruptcy of an enterprise or by a court decision.
- Combined option. Some banks use an individual approach to the client and offer a combined option, which consists of prolonging the contract with a simultaneous change in currency, or providing credit holidays for a certain period. Typically, this occurs when debt restructuring is initiated by the client himself.
How is debt restructuring carried out?
When initiating debt restructuring, the client is required to personally visit a bank branch by writing an application.
The document states:
- Date and number of the loan agreement.
- Total loan amount.
- Monthly payment amount.
- The amount of debt already repaid and the amount of the balance.
- Last payment date.
- Date of first delay (if any).
- The feasible amount of monthly payment that the client can pay to the bank to pay off the debt.
The most important stage in the matter of restructuring is the choice of a scheme for carrying out this procedure. It all depends on the individual situation and the same scheme cannot be applied to all clients.
For example, when leaving a job, a client may need a credit holiday, which will allow him to stabilize the financial situation in the family for several months until he finds a new job.
A change in the basic income will be suitable for the contract extension scheme. The client still receives the main income, but at the same time can no longer fully pay the amount under the contract.
Despite the fact that each bank has its own restructuring schemes, in some cases the Lender can meet halfway and develop an individual scheme for the client, taking into account his difficult circumstances.
The following documents must be attached to the application:
- passport (original and photocopy of main pages);
- a copy of the contract;
- the document that became the reason for applying for debt restructuring (certificate from the hospital, summons to the army, work record book with a record of dismissal, certificate from the Employment Center with a note on registration, etc.).
Every special case The lender will consider it individually and make a decision on restructuring based on the document. If the debt balance is large and there is an obvious reason that caused financial difficulties for the client, the bank will make a positive decision on restructuring the overdue loan.
The issue of restructuring for each client is considered by the Credit Committee and, if approved, the client is offered an additional agreement to the main agreement.
This is the main difference between restructuring and refinancing, where a new agreement with a new repayment schedule is signed with the client, and the debt under the current agreement is repaid by the bank.
How often can a loan be restructured?
The law does not limit the number of customer requests to banks for loan restructuring.
Thus, for each loan agreement, the client can count on restructuring.
If in the past, after carrying out this procedure, the borrower again begins to miss payments without an objective reason, then in the future the bank has the right to refuse the client this procedure.
All information and information on loans, payments, schedules and methods of repayment is reflected in the credit history, which is submitted monthly by Lenders to RBKI (Russian Bureau of Credit History).
Banks turn to this information not only when considering an application for a new loan, but also when considering an application for refinancing or restructuring. Therefore, after the bank’s approval and changes to the terms of the agreement, you should not miss monthly payments and spoil your credit history.
If the bank refuses to carry out restructuring, the Creditor may:
- demand early termination of the contract with full payment of the debt;
- transfer the remaining debt to collectors;
- file a claim in Court.
What are the consequences of a late payment?
With the development of the banking market and the increase in the amount of consumer lending, the number of overdue payments among the population has increased.
Happens for various reasons. Sometimes they are quite objective: deterioration in financial situation, loss of income, deterioration in health, etc. But sometimes late payments are due to the dishonesty of clients, their lack of discipline and simply financial illiteracy.
Before talking about the impact of restructuring on credit history and the need for it, it is worth mentioning what the client faces with an overdue loan.
Delay is considered a violation of the payment schedule in accordance with the terms of the contract. Absolutely every loan agreement is accompanied by a payment schedule, which reflects the amount of the monthly payment, the structure and scheme of debt repayment.
Some clients believe that being late by one day and being late by two weeks have different meanings in terms of violation of the terms of the contract.
At the same time, for the bank, even one day of deviation from the established payment schedule is considered a violation and, according to the terms of the agreement, the client may be subject to a fine.
Each bank independently determines the amount of penalties and the procedure for calculating them. In some cases, this may be a one-time late payment fee, and in some cases, penalties will accrue every day until the current balance is paid off.
The client can always see the specific amount of penalties in the contract or in the tariffs of the banking product that the borrower chooses.
But penalties are the smallest part of a series of troubles that await the borrower if the loan is not repaid on time.
What awaits the client in this case?
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Before you take such a serious step as restructuring an overdue loan, you need to clearly understand why you are doing this and whether such a procedure will really be a deliverance.
In theory, the restructuring or refinancing procedure is designed to ease the financial burden in order for the borrower to repay the debt. In reality, everything is not so rosy. Many banks, promising attractive terms for changing the contract, involve the client in an even greater financial trap.
Ignorance of financial and legal aspects This procedure may result in the client simply being unable to repay the debt. In any case, the case will go to court and then the bailiffs will join all the troubles, who will receive alienation from the borrower of the debt.
To prevent this, you need to approach the restructuring procedure very carefully and pay attention to the following points:
- Method of restructuring.
- Write-off of penalties. If they are included in the total debt, you can ask for a reduction in the fine or count the monthly penalty as a one-time penalty.
- It is necessary to immediately calculate the total amount of overpayment on the loan in case of prolongation of the contract. If there are no more than 5-6 months left before the expiration of the agreement, then it is better to find other ways to repay the debt and not renew the loan agreement.
It is difficult for an ordinary borrower to understand all aspects of restructuring. Often, favorable conditions from banks turn out to be an unbearable bondage.
Some financial institutions may refuse this procedure altogether, citing the debtor’s bad credit history or other factors.
The best option in such a situation would be to contact professional law firms that are engaged in helping citizens provide loans on favorable terms.
Video. What should you pay attention to before signing a contract?
Impact of restructuring on credit history
Many conscientious borrowers are so afraid of ruining their credit history that they are afraid to contact the bank with a restructuring application. Seeing no way out of the difficult financial situation, they take out new loans to pay off old ones and drive themselves even deeper into debt.
Let's find out how much the refinancing or debt restructuring procedure affects the client's further credit history?
Of course, absolutely all information about the loan, changes to its terms, and the reasons that led to these changes will be reflected in the client’s credit history.
All this information is located in a single national bureau and absolutely all Lenders turn to it before agreeing on the issuance of a loan. But deterioration of your credit history due to refinancing or restructuring can be avoided if you independently initiate the issue of revising the terms of the contract, without waiting for late payments and penalties for them.
But if you contact the bank with a request to revise the terms after the delay has occurred, it will significantly worsen your credit reputation.
Financial experts distinguish three options for damaged credit statistics:
- weak - if the delay is made within one and is covered by payment;
- average – several months;
- high – the resulting debt is not covered by payments, and the restructuring was initiated by the bank itself.
With the latter option, it will be very difficult for the borrower to prove his solvency and integrity in the future in order to obtain a new loan.
The procedure for restructuring an overdue loan
Typically, banks are reluctant to write off fines and penalties for late payments and, when carrying out the restructuring procedure, include these amounts in the total debt.
When signing a document, you should definitely pay attention to this fact and, in case of large penalties, you can go to court. Of course, only if you have an objective reason for the late payment.
As mentioned above, you must provide a certificate indicating the reason why you are asking to reconsider the terms of the agreement and what caused the non-payment of the loan.
In most cases, the court will take the borrower’s side if the reason for non-payment of the loan is dismissal from work, a sharp deterioration in health, loss of ability to work, etc. In this case, the court may order a long extension of the loan agreement with exemption from interest and penalties. The borrower will only be obligated to return the body of the loan.
Restructuring procedure
In the same way, the bank itself can write off the resulting fines and penalties, changing only the principal balance of the debt.
The procedure for carrying out the restructuring procedure is as follows:
- The bank offers to fill out an application for restructuring and indicate the reasons for making changes to the terms of the agreement.
- The financial institution analyzes the reasons specified in the application and, if they are objective, makes a decision on approval or refusal. If the Lender sees the reasons for the deterioration of the borrower’s condition, then he can offer an extension or credit holidays to relieve partial financial burden.
- The client provides a full package of documents necessary for debt restructuring.
- A bank employee prepares new loan documentation that reflects the terms of debt repayment.
- The client checks the documents and signs.
If the bank independently initiates a restructuring procedure in case of debt, then the client has the right to accept or refuse the new conditions.
First, you need to compare the new terms of the contract with the old ones, calculate the amount of overpayment when prolonging the contract, and pay attention to whether penalties are included in the total amount of debt or not.
Conclusion
When facing financial difficulties and before deciding to restructure the contract, many clients wonder how profitable it is? Will such a procedure cause new financial problems?
Restructuring: help or a new financial trap?
This issue needs to be considered from two sides.
On the one hand, such a tool allows you to reduce your monthly credit burden, which allows you to improve your financial situation. But prolongation of the contract entails an overpayment on the loan. If we consider the issue in this aspect, then from a material point of view it is not profitable.
But, on the other hand, such a procedure will protect you from litigation, penalties and deterioration of your credit history, which is very difficult to restore.
Clearly, this option should be resorted to only if there are no other ways to fulfill your financial obligations to the bank.
If you simply want to reduce your financial burden through restructuring in order to manage the remaining funds monthly, then in this way you will only be doing yourself a disservice.
Video. Loan restructuring - essence and mechanism
Restructuring of credit debt is a change in the current terms of the loan agreement concluded with the bank. This procedure is carried out only by the bank that issued the loan to the citizen.
Restructuring services are most often intended for citizens who currently do not have the financial ability to repay their debt in the same way. That is, for citizens who find themselves in a difficult situation, which has resulted in the inability to make monthly payments in full.
The essence of loan restructuring
Standard loan debt restructuring looks like an increase in the loan repayment period. In fact, a new loan agreement is concluded with the borrower and the old one is closed, or changes are made to the current payment schedule. Each bank can carry out this procedure using its own algorithms.
As a result of increasing the repayment period, the size of the monthly payment decreases, and the debt burden on the borrower decreases. The new deadline is selected in such a way that the payments are ultimately feasible for the citizen. As a result, the client does not fall into the problem category and does not spoil his .
As a result of increasing the term, the final overpayment increases proportionally, therefore Loan restructuring cannot be called beneficial for the client. But in any case, if necessary, it is worth carrying out so that the debt does not accumulate penalties and fines, and also for the benefit of your own credit history. In the future, when the debtor’s financial situation improves, there is always the opportunity to make full or partial early repayment of the debt in order to reduce the overpayment.
How and when to restructure loan debt?
To carry out restructuring, you should contact the creditor bank with your problem. At the bank's office you will be referred to a specialist who deals with problematic contracts. This could be the collection or security service of the bank; each institution determines which department deals with the restructuring of loan debts. Usually this department is located in the central office of the bank or in the largest branch in the locality. You can call the bank's hotline and find out who and when you can contact.
Another important question is whether when to contact the bank for debt restructuring. It is important to note here that this should be done in advance, before the fact of the delay in the monthly payment has yet occurred. In this case, there will be no fines or damaged credit history; the current terms of the loan agreement will simply be changed without harm to the borrower. So, if you understand that the moment is approaching when you will not be able to make your next monthly payment, do not waste time, but immediately contact the creditor bank with a request to restructure your credit debt.
Many borrowers mistakenly believe that they may encounter negativity when contacting the bank with their problem. But this is not true at all. Banks are also interested in having as few problematic loan agreements with overdue payments as possible. This fact affects their reputation in the eyes of the Central Bank, and this is extremely important for lending organizations.
If you already have current debt, then restructuring in such a situation will be more difficult. The agreement has already become problematic and is subject to penalties and fines. Not every bank will agree to meet the borrower halfway and restructure existing problem debt. So, be prepared for the fact that you will still have to pay all the fines and get into the payment schedule, solving your financial problems. But in any case, contact the bank with your problem, it is quite possible that they will still help you.
Most often, banks themselves offer to restructure debt under a problematic agreement, as last step before filing the case in court. But there is one nuance here - a new loan agreement will be drawn up for an amount that includes all fines and accrued interest for late payment. As a result, the amount borrowed on credit may increase significantly on paper, and interest will be charged on it again.
Be sure to think about whether you need restructuring in this case, your credit history is already damaged anyway, and the court will fix the debt, but the court decision itself can cancel a significant part of the fines and interest.Mortgage loan restructuring
During the crisis, the issue of restructuring mortgage debt became particularly acute. The solvency of citizens has decreased, and the amount of mortgage payments constitutes a significant part of the budget of the borrower and his family. Banks are willing to accommodate mortgage borrowers halfway, understanding that the crisis affects the financial capabilities of citizens. If you have a problem paying off your mortgage debt, be sure to contact your bank. Remember that the property purchased under the contract is collateral; it is in your interests to negotiate with the bank to avoid seizure of the collateral.
In practice, most often the amount of payments is simply changed; some addition to the current loan agreement can be drawn up. But the contract itself will not be reissued. The fact is that when drawing up a new contract, you will need to again collect certificates and make an assessment of the housing. Therefore, this method will be simpler.
Restructuring of foreign currency loans
At the peak of the growth of the dollar against the ruble, this issue was very, very acute; many citizens found themselves in a real financial trap. The problem was solved at the federal level, the state took special measures to help borrowers who were trapped due to currency fluctuations. To a greater extent this affected foreign currency mortgage loans. The monthly payment is already not small, but with the growth of the currency it has become twice as much.
At the beginning of 2015, deputies submitted to the State Duma a draft federal law on the restructuring of ruble obligations under credit agreements and loan agreements in foreign currency. But at this point in time the law has not been adopted.
By the way, the Central Bank of Russia sent a letter of recommendation. We recommend you read it.Banks are not particularly willing to restructure debt on foreign currency loans, so immediately be prepared for the fact that you may be refused. In reality, this will look like re-signing the contract and transferring the amount of debt from one currency to another. The conversion will be made at the bank rate on the day of the debt restructuring operation.
Consumer loan restructuring
This operation is carried out most often by banks. In this case, consumer loans include almost all credit products: credit cards, targeted and non-targeted cash loans, car loans and overdrafts. Most often, citizens turn to banks with such problematic products.
This procedure is not complicated at all, and banks willingly agree to it. In a crisis, when there are more and more problematic agreements, the restructuring of consumer loans is the only opportunity for banks not to acquire problematic loan agreements. Most of the transactions are consumer loans.
What documents will be needed for loan restructuring?
Ideally, the borrower must prove to the bank that he really is in a difficult financial situation and cannot make monthly payments in full. This can be any documents confirming your position. For example:
— sick leave(your own or loved ones);
— work record book with a note of dismissal/redundancy;
- death certificate loved one;
— prescriptions for expensive medications needed by the borrower or his relatives;
— documents about loss or damage to real estate.In general, these can be any documents that directly or indirectly indicate the impossibility of making loan payments at the moment. If you have such a document, then the chances of approval of debt restructuring increase significantly. But even if the application is not supported by any documents, it can still be considered with a positive outcome.
When visiting the bank, you will need to write an application for debt restructuring. A standard form will be provided to you by a bank employee dealing with this issue. Or you can fill out general benefits in advance (you can download them on our website). It is better to prepare two copies of the application: you will submit one to the bank, and on the other (your copy) the bank employee will mark the acceptance of the application for consideration. If refused, you can go to court by attaching your copy of the application.
Restructuring of loans in Russian banks
The financial crisis has added problems to the majority of Russians who previously took out a mortgage loan. It will help you avoid losing your home, perhaps your only one, and restore your solvency mortgage restructuring. This assistance is provided by the state through the Housing Mortgage Lending Agency (now known as JSC DOM.RF), reducing the loan burden by up to one and a half million rubles.
How it works?
Mortgage restructuring 2019 became possible after the entry into force of the decree signed by Dmitry Medvedev on April 20, 2015 (Resolution of the Government of the Russian Federation dated April 20, 2015 No. 373 is currently called “On the main conditions for the implementation of the program of assistance to certain categories of borrowers for mortgage housing loans (loans ), finding themselves in a difficult financial situation, and increasing the authorized capital of the joint-stock company "DOM.RF").
The program provides loan reduction in the amount of up to one and a half million rubles at the expense of one-time forgiveness of part of the debt and/or replacement of foreign currency on a loan with Russian rubles at a rate lower than the rate of the corresponding currency established by the Central Bank of the Russian Federation on the date of restructuring. Monthly loan payments after restructuring are reduced to 11.5% per annum for loans taken in foreign currency, or to the percentage rate in effect on the date of restructuring for loans taken in rubles. In addition, the borrower is exempt from paying penalties accrued under the loan agreement.
Losses incurred by the bank as a result of restructuring are compensated by the state. Thus, the financial burden on the borrower is significantly reduced, and banks do not lose their money.
Necessary Requirements
In order to receive support and use the services of a mortgage restructuring agency, there are a number of conditions and parameters.
Firstly, they relate to the mortgaged housing itself, which is pledged to the bank.
- This must be the borrowers' only home. Thus, mortgage loans for which several apartments or houses were purchased are not subject to restructuring. Borrowers are allowed to own other real estate, or rather, the total share in it is no more than 50% for all family members.
- The size of the home also matters. It should be a small apartment or house. The resolution specifies the maximum permissible footage. For a one-room apartment no more than 45 square meters. m, for a two-room apartment - no more than 65 sq. m. m, and for three-, four-room, etc. this area should not exceed 85 square meters. m.
- The purchase of housing and the issuance of a mortgage loan must be made no earlier than a year before the restructuring.
Eligibility for a subsidy
Secondly, the resolution clearly defines the categories of people who can apply for assistance from the state and not lose their housing by becoming a habitual defaulter. It included:
- citizens who are parents or guardians (trustees) of one or more minor children;
- combat veterans;
- disabled people and parents of disabled children;
- persons who are dependent on full-time students under 24 years of age.
Mortgage restructuring 2019 applies to bona fide borrowers who have experienced financial difficulties due to a decrease in their standard of living, for example, due to job loss. At the same time, they must document the fact that after making the monthly mortgage payment, from the total family income there remains for each family member less than 2 subsistence minimums established by the state in the region of residence of the borrowers. Or your mortgage payments have increased by 30 percent or more.
After all conditions are met, the borrower has the right to apply for mortgage restructuring. Even if this is not a complete relief from debt, but only a reduction in payments, it makes a mortgage loan more affordable.
Debtor's action algorithm
To receive financial support for a mortgage from the state, you must contact the bank branch where the mortgage loan was issued with an application for restructuring and a package of necessary papers.
Below is an approximate list of documents that are required to be submitted for consideration of your application:
- passport;
- loan agreement and annexes thereto (if any);
- bank certificate indicating the repayment period and amount of debt;
- a document containing information about the co-borrower’s income (income certificate);
- documents confirming the validity of the reasons for the debt:
- in case of loss of a job - a work book with a record of dismissal, a certificate of registration at the employment center as an unemployed person indicating the amount of benefits received;
- for health problems - a certificate of illness from a medical institution;
- if the amount of labor income decreases - a certificate from the employer about a salary reduction, etc.
Note! Since 2017, the provision of extracts from the Unified State Register of Real Estate is not required: JSC "DOM.RF" independently verifies the relevant information on real estate.
Please note that the above list is approximate and may be supplemented or changed depending on the specific bank. The processing time for an application may also vary (on average, up to 10 working days).
In conclusion, I would like to note that an economic crisis is not a reason to panic, because there is always a way out. Mortgages with state support are designed to help citizens who find themselves in a difficult financial situation solve their housing problem.
Welcome! I can assume that you have a problem repaying a loan or mortgage. And before you fall into a “financial hole,” we offer two effective tools to solve this issue. Loan restructuring and refinancing. Two processes that provide different opportunities and pursue the same goal: reducing the financial burden on the borrower. This article will help you understand the intricacies of popular banking programs and help you avoid “credit bondage.” We will also tell you in detail what mortgage restructuring with the help of the state is in 2019.
Mortgage loan restructuring is a change in the loan agreement in order to improve conditions for the borrower. As a rule, the bank reduces the amount of monthly payments and increases the loan term. In addition, credit holidays are provided, which average six months.
During the holidays, you can pay only the “body” of the loan, without interest to the bank or not make payments at all. The bank may even write off penalties and fines for late payments. Each case is considered individually and in most cases you can significantly improve your loan conditions.
If you have serious arguments, such as dismissal from work, a reduction in wages, illness, long-term child care, the best solution is to go to the nearest bank branch, explain your situation and ask for debt restructuring.
It is advisable to resolve credit issues in advance, before debt arises. The bank is always more willing to make concessions to clients with a good credit history. Even if late payments have already appeared, do not hide from the creditor. Make an appointment. Let us know about your desire to cooperate and ask for assistance in resolving your issue.
Mortgage restructuring in 2019 showed that it is more profitable for the bank to find a solution acceptable to both parties than to bring the matter to court. So the more positive your reputation as a borrower, the greater the chances of resolving the problem quickly and without unnecessary hassle. In addition, in the case of a good credit history, you can apply both in your own and in a third-party bank.
Refinancing or restructuring?
Now you know what restructuring is. Let's find out its differences from refinancing. Refinancing is refinancing with another bank on more favorable terms. Typically, banks use refinancing of mortgages and car loans. If you have a loan agreement with a rate of 17%, and another bank has a program with 11.4%, and this is the real rate for a mortgage program with state support, then why not reissue this agreement?
A refinancing loan is profitable even if the amount of the current loan exceeds 1%. So draw your own conclusions.
After a positive decision from the bank, a new loan is issued to repay the previous one. And you pay less.
The restructuring program is applicable only to the bank where the loan has already been issued. Refinancing, both in the same bank and in any other.
It’s difficult to say which is more profitable. Depends on the specific situation. If you find a good refinancing program with a significant difference in the annual interest rate, then the benefits are obvious. It is important that the new bank you choose approves your application. And for this, credit history is important.
Restructuring is a real way out of a difficult situation for a person who is faced with financial problems. Changes in exchange rates, bankruptcy of enterprises, layoffs at work, reductions in wages - all these troubles are very relevant, unfortunately, for most borrowers. Especially in recent years.
Loan debts began to grow like a snowball. Bank clients picketed branches, demanding changes to lending conditions. Considering that easing mortgage conditions is the only reasonable way out in a crisis, the banks agreed to meet them halfway. Mortgage restructuring is a necessary reality. Moreover, there are no more state-supported mortgages.
Today, it has become possible to restructure a mortgage, even with current debts and, as a result, a damaged credit history. In addition, the state came to the aid of people in difficult life situations.
State-assisted restructuring
On April 20, 2015, a new decree on the restructuring of mortgages with the help of the state came into force. Changes were made, thanks to which the amount of state assistance for the borrower was increased three times. 4.5 billion rubles have been allocated. In general, the program to support mortgage borrowers has been successfully applied in Russia since the beginning of 2009.
Based on the results of the work, overdue debt on foreign currency loans was halved, and on ruble loans there is also a steady downward trend. Assistance was provided to 9.5 thousand borrowers out of 14 thousand who applied, and at least 22 thousand are planned. You may be one of them, but you need to remember that the program’s duration is limited.
Mortgage restructuring in 2019 , is possible mainly only for foreign currency borrowers. Although ruble mortgages are formally also subject to restructuring, banks do not give permission for it and block the transfer of documents to AHML and the interdepartmental commission.
If you belong to any category of federal beneficiaries, then you can safely apply for help from the state in restructuring your mortgage. Engaged in this program government agency— Agency for Restructuring of Housing Mortgage Loans (ARHML).
How it works
If your application is considered positively, your debt may be reduced by a decent amount. To be precise, the principal can be written off all at once or spread over many payments. As a result, the reduction in mortgage debt will be 20%, but not more than 600 thousand rubles. If you have two children, then you can receive a write-off of 30% up to 1,500,000 rubles. Credit holidays can be up to 1.5 years. The annual rate can be reduced to 12%. Foreign currency is converted into rubles at the Central Bank exchange rate or lower. All costs associated with mortgage restructuring are borne by the state.
The family of our readers from Novosibirsk has already received 438,000 from the state to pay off the principal debt. This is 20% of its balance. The review took only 2 weeks. Mortgage in Sberbank. Everything is real!
Taking into account the conditions of restructuring, all banks are happy to offer assistance under this program and independently submit the application to ARHML. Of course after you collect Required documents and fill out an application for restructuring of mortgage debt. By the way, participants in the program to help borrowers make up almost 97% of the lending market. Therefore, there is a high probability that your bank is accredited by ARHML and the restructuring of your mortgage will be approved. The main thing is that you and the lending object comply with state requirements.
Terms and requirements
- Parents or guardians of minor children, military veterans, disabled people and parents of disabled children can participate in the program.
- There is also an income requirement. After paying off the mortgage, it should not exceed two subsistence minimums for each family member.
- In 2017, in addition to traditional beneficiaries, the program state restructuring, families with adult children studying full-time in educational institutions were added.
- There are also requirements for the object of collateral. The home must be the only one for the family and purchased at least 12 months before the restructuring. It is allowed for one of the family members to own another property, but not more than 50% of it.
- If the borrower is not a large family, then there are restrictions on the size and cost of the apartment or house. The area of a one-room apartment is no more than 45 square meters. m., two-room apartment no more than 65 sq. m., three-room apartment no more than 85 sq. m. m.
- The cost of the apartment should not exceed the market average by more than 60%.
If you meet all the specified restructuring conditions, collect a package of documents.
Documentation
You will need the following documents: a Russian passport, a loan agreement, a payment repayment scheme, an extract from the Unified State Register for the collateral value, a certificate - an extract from the Unified State Register about the generalized rights of an individual, a certificate of income for the last 3 months.
If you lost your job, then prepare the original work book with a dismissal stamp and a certificate from the employment center indicating the amount of benefits.
If necessary, the bank may request additional documents. The application for restructuring is filled out at the branch of the bank where the mortgage was issued. Review of the application will take 10 days.
We discussed a more detailed list of documents for restructuring a mortgage with state support in the previous article “”.
Step-by-step instruction
So, if you decide to reduce your debt and get a restructured loan, I suggest you the following course of action.
- The first thing you need to do is contact the bank and find out which branch you can go to for advice on this program.
- During the consultation, clarify all additional documents that are needed specifically in your case.
- We order an extract from the Unified State Register of Mortgaged Real Estate from the district multifunctional center (MFC). There we also order an extract from the Unified State Register of Generalized Rights. The second certificate stating that you and your family members have no other housing. Shares in other real estate are allowed, but in total no more than 50%. Production time 7 days.
- We fill out an application for restructuring of mortgage debt. You can fill it out at a bank branch. We provide a complete package of documents to the manager.
- We are waiting for AHML's decision up to 30 days (actually 10 working days).
- You will be notified of the result by call. Then they will invite you to the bank to restructure your loan and sign new loan documentation.
- Within a month, the mortgage will arrive from the archives to the bank. Next, you will need to go to the justice department with a complete package of mortgage documents and register changes in the mortgage.
Important point. The loan will be recalculated from the date of filing the application for restructuring. It may be a pleasant surprise for you that this month you will have to pay the mortgage amount significantly less than according to schedule. In our example, a family from Novosibirsk had a mortgage payment of 24,148, after restructuring 19,478, and in the current month only 660 rubles. Use ours to find out what your mortgage payment will be after your application is approved.
We would like to note that in some cases the bank may refuse. The reason for this may be inaccurate information in the application or incorrectly completed documents. Don't despair. You should find out the reason for the refusal from the bank manager and apply again.
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